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Reduced RoDTEP rates not applicable to exports of agri, processed food products: Govt

February 24, 2026 4 min read Economics GS3 (Economics Trade Agriculture)
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What Happened

  • The government clarified that the reduced rates and value caps notified under the RoDTEP scheme (via Notification No. 60, dated February 23, 2026) do not apply to agricultural and processed food exports
  • The Directorate General of Foreign Trade (DGFT) issued a notification specifying that products under ITC HS Chapters 1 to 24 — covering all agricultural produce and processed food products — are exempt from the reduced RoDTEP rates
  • This follows a recent decision to halve duty benefits for exporters in many other sectors
  • The exemption protects agri-exporters' benefits at existing rates, distinguishing farm commodities from manufactured goods in export incentive policy

Static Topic Bridges

RoDTEP Scheme — Architecture and Mechanism

The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme provides rebates to exporters for embedded taxes and duties incurred in the manufacturing and distribution chain that are not refunded under any other mechanism — such as central, state, and local taxes that become part of export costs but remain un-credited under GST. Operationalized from January 1, 2021, RoDTEP replaced the earlier Merchandise Exports from India Scheme (MEIS), which was found to be non-WTO-compliant.

  • Administered by: DGFT (Directorate General of Foreign Trade) under the Ministry of Commerce and Industry
  • Rebate rates: Notified product-wise, ranging from 0.3% to 4.3% of FOB (Free on Board) value
  • Mechanism: Exporters receive electronic scrips (e-scrips) credited to their ICEGATE accounts; these scrips are transferable and can be used to pay basic customs duty
  • WTO compliance: Unlike MEIS (which gave income-linked incentives banned under WTO's Agreement on Subsidies and Countervailing Measures — ASCM), RoDTEP is structured as a tax rebate (permissible under WTO rules)
  • Coverage: Initially covered manufacturing exporters; agriculture was added as a recognized export category
  • Validity: Extended through March 31, 2026 (and subsequently further extended)

Connection to this news: The DGFT's notification carving out Chapters 1-24 (agri and processed food) from the reduced rates ensures that agricultural exporters continue to receive full RoDTEP benefits even as other sectors face rate reductions. This reflects the government's sensitivity to farm export competitiveness.

ITC HS Code Classification System

The Indian Trade Classification based on Harmonized System of Nomenclature (ITC HS) is the standard coding system used for classifying goods in India's import-export trade. It is derived from the globally harmonized WTO Harmonized Commodity Description and Coding System (HS), maintained by the World Customs Organization (WCO). The system uses 8-digit codes; the first 6 digits align with global HS codes, with 2 additional digits for India-specific classification.

  • Chapters 1–5: Live animals and animal products (meat, fish, dairy)
  • Chapters 6–14: Vegetable products (cereals, fruits, vegetables, oilseeds, coffee, tea)
  • Chapters 15: Edible fats and oils
  • Chapters 16–24: Prepared foodstuffs, beverages, tobacco (processed food products)
  • Chapters 25+: Mineral products, chemicals, manufactured goods (not covered by this exemption)
  • The classification determines which RoDTEP rates, duties, and trade policy notifications apply to a given product

Connection to this news: The exemption is defined precisely by ITC HS Chapters 1-24 — covering the entire agricultural value chain from raw farm produce through to processed foods. This technical demarcation is important for UPSC, which tests the ability to identify what falls within HS chapter ranges.

DGFT and India's Export Promotion Architecture

The Directorate General of Foreign Trade (DGFT) is attached to the Ministry of Commerce and Industry and serves as the primary regulatory body for implementing India's Foreign Trade Policy (FTP). It administers export promotion schemes, issues Importer Exporter Codes (IEC), and notifies trade policy amendments through circulars and notifications.

  • DGFT operates under the Foreign Trade (Development and Regulation) Act, 1992 (amended 2010)
  • It issues trade notices, policy circulars, and public notices that amend the Foreign Trade Policy mid-course
  • The Foreign Trade Policy (FTP) is typically issued for 5-year periods; the current FTP 2023-28 was released in April 2023
  • Other DGFT-administered schemes: Advance Authorisation, Export Promotion Capital Goods (EPCG), Duty-Free Import Authorisation (DFIA), and the Status Holder scheme
  • DGFT also administers the Interest Equalisation Scheme for pre/post shipment rupee export credit

Connection to this news: The DGFT notification clarifying the RoDTEP exemption for agri exporters is a mid-course policy refinement typical of DGFT's regulatory role. UPSC tests knowledge of DGFT's functions and the institutional architecture of export promotion.

Key Facts & Data

  • RoDTEP operationalized: January 1, 2021
  • Replaced: MEIS (Merchandise Exports from India Scheme)
  • RoDTEP rates range: 0.3% to 4.3% of FOB value
  • Refund mechanism: Transferable electronic scrips (e-scrips) via ICEGATE portal
  • Products exempt from reduced rates: ITC HS Chapters 1–24 (agri + processed food)
  • Exemption notified via: Notification No. 60, dated February 23, 2026
  • Administering body: DGFT (Ministry of Commerce and Industry)
  • FTP governing statute: Foreign Trade (Development and Regulation) Act, 1992
  • Current FTP: FTP 2023-28 (released April 2023)